Congestion, land use, and job dispersion: A general equilibrium model

In dispersed cities, congestion tolls would drive up central wages and rant s and would induce centrally located producers to want to disperse closer t o their workers and their customers, paying lower rents and realizing produ ctivity gains from land to labor substitution. But the tolls would also ind uce residents to want to locate more centrally in order to economize on com muting and shopping travel. In a computable general equilibrium model. we f ind that the centralizing effect of tolls on residences dominates on the de centralizing effect of tolls on firms, causing the dispersed city to have m ore centralized job and population densities. Under stylized parameters, we find that efficiency gains from levying congestion tolls on work and shopp ing travel are 3.0% of average income. About 80% of such gains come from ro ad planning and 20% from tolls. (C) 1999 Academic Press.